The TC applies the brake of the offending wheel spinner, knocks down engine timing, and yanks the throttle back. It is VERY agressive.
It compares the difference of front wheel speed to rear wheel speed, making the assumption that the front wheels aren't gonna spin....
LT1 cars all had 8.5\" axles unless it came in a Limo, then it got the bullet proof 9.5 semi floater. (no, I don't recommend it as an upgrade, it is VERY heavy). Parts are common everywhere. I see them all over swapmeets, complete with 3.42 or 3.73 gears (used) that are half decent. But for carrier, look to Randy's ring and pinion, you can get a posi there, or Summit, or Jegs, and then you have to have it installed.
Do NOT look to get the PowerTrax unit or LockRight. They are quite dangerous, and should never be considered for on highway driving, they run locked all the time like a spool, and can cause very easy spinouts on slick roads (wet and icy/snowy). And they tend to fight you in slow gentle curves like highway turns, they want to fight you and stay locked up.
I would personally look at a Eaton posi (clutch posi, rebuildable), they are OEM type units for many. GM has also used Auburn (cone posi, not rebuildable). I like the Eaton design. They are solid and can be biased up to as high as 800# between the axles, stock GM is 300#, you can do 200# and 400# also.
In general the tighter the more it will fight you. My posi now is pretty tight, even in tight corners I have to give it more gas to keep the car moving, or goose it and light them up.... I like it!!!! I can really really get on it hard now where before I always had the feather the heck out of the one wheel wonder....
Given a choice, posi vs TC, posi wins by a LONG shot....
But swapping in a posi unit is not something the average backyard joe can do, it takes special tools (which aren't terribly expensive) and time and room and experience is really worth it. But don't be dicouraged, I am going to try it and maybe get my 3.42's setup with posi this weekend! We'll see how much time I have. I haven't done it, but plan for at least 8 hours to work.